Friday, March 22, 2013

China's new leader visits Russia on first foreign trip

By Thomas Grove

MOSCOW (Reuters) - Chinese leader Xi Jinping sent a signal to the United States and Europe on Friday by visiting Russia on his first foreign trip as president, underlining the importance of Beijing's growing alliance with Moscow.

Chinese President Xi Jinping inspects the honour guard during a welcoming ceremony upon his arrival at Moscow's Vnukovo airport March 22, 2013. REUTERS/Maxim Shemetov

The world's largest energy producer, Russia, and its biggest consumer, China, want particularly to bolster their clout as a financial and geopolitical counterweight to Washington, whose "Asia pivot" regional strategy worries Beijing.

Xi and President Vladimir Putin, who meet at 3:00 p.m. (1100 GMT), may preside over deals that would make Beijing Russia's top customer for oil, although they are not expected to sign a long-sought agreement on supplies of pipeline gas to China.

Just before Xi arrived with first lady Peng Liyuan, a $2 billion (1.3 billion pounds) deal was announced by Russian and Chinese companies to develop coal resources in eastern Siberia, which underlined the countries' intentions.

Putin has said he wants to "catch the Chinese wind in our economic sail" and that desire will grow stronger if China overtakes the United States as the world's largest economy during Xi's 10-year term.

Perhaps symbolically, Xi's visit overshadowed a meeting between leaders of the Russian government and the European Union's Commission that was also taking place in Moscow.

Putin and Xi, less than a year apart in age, echoed one another in interviews before the visit, each saying the Chinese leader's choice of Moscow as his first destination was evidence of the "strategic partnership" between the nations.

A smiling Xi, 59, recalled that he read Russian literature in his younger days. Putin, 60, said Russian-Chinese relations were at "the best in their centuries-long history".

The two U.N. Security Council members' solidarity on important global issues has strengthened in recent years.

They have joined forces three times to block Western-backed measures on the conflict in Syria despite talk of grumbling in Beijing, and Russia has followed China's lead on North Korea - two issues likely to come up in Friday's talks.

They have negotiated alongside the West on Iran's nuclear programme, but have watered down past sanctions in the Security Council and opposed new punitive measures as counterproductive.

Russia has added to Japan's woes over territorial disputes with Beijing by playing up its control of an archipelago claimed by Tokyo. Beijing and Moscow have also stood side-by-side in rejecting Western criticism of their record on human rights.

But the lockstep movement on the global stage has not translated into easy agreement on bilateral energy deals, underlining the limits that persist in the relationship.

NEW PRESIDENT, NEW IMPETUS

A huge business complex on the edge of Moscow, decorated with Chinese paintings and red silk armchairs, is the kind of enterprise Xi wants to nurture in Russia.

Just off the traffic-choked highway ringing Moscow, a jumble of Chinese and Russian firms, a 400-room hotel and conference venues sprawl over the 200 square km (77 square mile), $350 million Greenwood complex, which was built by a Beijing-controlled consortium with materials shipped from China.

Xi's presidency is seen as a chance to put new impetus into such projects and into ties with Russia as a whole, although Putin said this week that bilateral trade had more than doubled in five years and reached $87.5 billion in 2012.

But the trade volume is still about five times smaller than Russia's with the European Union, and also far smaller than China's trade with the United States.

The rising influence of China, with its proximity to Russia's sparsely populated eastern parts and nearly 10 times more people, has also given rise in Russia to worries that China may one day challenge Moscow's influence on its own territory.

Russia has created a separate ministry to channel resources to its far east, which complains of neglect and underfunding more than 20 years after the Soviet Union collapsed.

Defence analysts say Russian efforts to allocate military resources, including air defences and nuclear submarines, to its eastern coast is an effort to counter China's rising military might - even as Russia sells weapons to its neighbour.

Like their populations, their economies are uneven. China's gross domestic product grew 7.8 percent last year, while Russia's growth was about 3.5 percent and was close to stagnating in February, with 0.1 percent year-on-year growth.

Xi and Putin are expected to attend a summit next week of the BRICS group of emerging market economies, another vehicle for their efforts to counter Western clout, and the Chinese leader will visit African nations Beijing is courting.

(Editing by Timothy Heritage)

News

Friday, March 22, 2013

China's new leader visits Russia on first foreign trip

By Thomas Grove